Remarketing

Strong March Resale Values Kick Off Auction Buying Season

Used vehicles sold at auction lost a scant 0.3 percent of their value in March, a month known for strong retention as tax-refunded buyers come out in droves, according to Black Book.

Harsh weather somewhat dampened the buying during the month, said Ricky Beggs, Black Book's senior vice president and editorial director.

"The harsh winter weather delayed the annual Tax Buying Season by keeping wholesale buyers on the sidelines longer than normal," said Beggs. "Typically, spring buyers will stock up in February and March, but the colder winter this year will mean the heavy buying season will take place in March and April instead."

Sales of vehicles from model years 2008 to 2012 posted their strongest month of the year compared to the 1.1 percent depreciation rate in February and 1.9 percent value loss in January.

Entry-level cars led all segments with a 2.6 percent increase in value with an average sale price of $7,491, a 15.9 percent fall from year-ago levels ($8,912). Vehicles in the category include the Chevrolet Aveo, Honda Fit, Kia Rio, Nissan Versa, and Toyota Yaris.

In the truck segments, cargo minivans led the way by gaining 1.7 percent in value with an average sale price of $9,218, a 17.6 percent fall from a year ago ($11,189). Vehicles in this category include the Dodge Caravan and Ford Transit Connect.

The sharpest depreciation among trucks came among luxury SUVs, which fell 1.3 percent in March to $33,591. These vehicles include the Cadillac Escalade, Toyota Land Cruiser, Land Rover LR3 and LR4, Lincoln Navigator, and BMW X5.

The nation's largest wholesale vehicle auctions, including Manheim and Adesa, have shifted to digital-only auctions and taken other precautions to protect the facilities from Hurricane Dorian's possible landfall later this week.

Overall used vehicle values are at strong levels. Crossover values are holding steady but there is cause for concern in the near future. Sedan values are expected to improve or stabilize as more crossovers enter the market.

The value of used fleet vehicles sold in wholesale channels increased 0.4% to $13,812 in July and are now up 4.1% through the first eight months of 2019, according to Tom Kontos, chief economist for KAR Auction Services.